Answers & Observations Blog

Stay up to date with the latest personal finance developments, financial planning advice, investment news and retirement planning tips from our team of certified financial planners and experienced wealth advisors here in New York City.

We also spoke to Stan Bunger and Susan Leigh Taylor of KCBS News Radio in San Francisco on the subjects of credit monitoring, the pros and cons of a credit freeze and how to manage a fraud alert. Audio of interviewTranscript of interview

We heard from clients frustrated and confused by the information provided by other media sources and the credit bureau websites. Here are answers to your questions:

What's the difference between a credit freeze, credit monitoring and a fraud alert?

A credit freeze completely locks your account - current creditors can still see your report, and you can still see your report, but if someone tries to open an account in your name, that attempt will be blocked. The fee to freeze the account is small, and may be $0 in some states. There is a fee of $3-10 to unfreeze your account (and you must be sure to have the PAPER copy of your PIN number to unlock the account.)

Credit monitoring allows banks, credit card companies, and auto-lenders to look at your credit report, but you will be alerted when such requests are made. Costs range from $10-$30 a month, with the more expensive services including scans of illicit networks where consumer data is bought and sold.

A fraud alert last only 90 days and must be renewed periodically. Your credit report is still accessible, but any business trying to access your report must go through additional verification steps. There is no cost to place a fraud alert.

Do I have to subscribe to credit monitoring in order to do a credit freeze?

No, though that is not obvious from the credit bureau websites. These businesses are trying to bundle the free or cheap credit freeze with the recurring expense of credit monitoring.

These numbers are the fastest way to apply the freeze WITHOUT buying the monitoring services:

Equifax - 1-800-349-9960

Experian - 1-888-397-3742

TransUnion - 1-888-909-8872

We have heard from some clients that they were turned away on some occasions and redirected to websites. We expect that occurred because the phone systems were overloaded, so try again in a week if that happens.

You, the consumer, are not the ultimate customers of the credit bureaus - mortgage banks, credit card companies, auto lenders, landlords, and employer are. If you freeze your credit, that's one less data point that can be analyzed, packaged and sold. The credit bureaus have no incentive to help you freeze your credit report.

Should I get credit monitoring anyway?

If you decide you need to keep your reports open, you can either pay for this service or perform the monitor on your own. We don't recommend using the credit bureaus' monitoring services - that's not their business. Instead, use IdentityGuard, LifeLock or MyFico. Each company has different options, prices points and benefits, so spend some time figuring out which options are best for you.

Alternatively, get in the habit of setting alerts in your banking and credit card websites for large (e.g. over $1000) transactions, and review your credit report periodically for accounts you didn't open.

Should I be looking at my credit report on an ongoing basis?

We suggest yes, at least once/year and more often if you're in the market for credit. CreditKarma.com will give you Transunion and Equifax reports for free (they get paid by advertising credit cards.) MyFico.com tracks all three bureaus, and includes alerts and traffic monitoring as well, starting at $19.99/month. Both services offer tools for figuring out how to raise your credit score.

Could a credit freeze affect other systems I use, for example, Social Security?

Unfortunately, yes. Systems like SocialSecurity/MyAccount query the credit bureaus to create challenge questions (e.g. "with which of these five banks did you have a mortgage in 2009?") If you don't create these accounts BEFORE you put on the credit freeze, you may be locked out. For Social Security, for example, you would have to go to a SS branch in person and fill out paperwork after showing proper ID.

Many e-Signature services do the same kind of verification through the credit bureaus, so be prepared for frustration in other elements of your financial life.

Sign Up With Your Email To Receive Tips And Advice From Our Wealth Advisors.

First Name

Last Name

Email Address

Thank you! You’ll hear from us shortly.

Past performance is not a guarantee of future results. The information and remarks made by Heron Wealth in these blog posts reflect our views as of that particular time. Such views are subject to change at any point without notice. We are providing these for informational purposes only and nothing herein should be deemed investment or financial planning advice or a recommendation to buy or sell any securities. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While Heron Wealth has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of any third party information presented herein. No guarantee of investment performance is being provided and no inference to the contrary should be made. Investing in securities is speculative in nature and involves substantial risk of loss. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.

Heron Wealth

Heron Wealth is a New York City wealth management firm. Our Professional Certified Financial Planners provide individuals with fee-only financial planning and investment advice to residents of NY, NJ and Long Island.

Heron Wealth is an SEC registered investment adviser; however, such registration does not imply a certain level of skill or training and no inference to the contrary should be made. Heron will only transact business in the states where the firm is noticed filed or otherwise exempt. This website is being provided for informational purposes only and nothing within should not be considered investment or financial planning advice or a recommendation to buy or sell any securities. Therefore, no investment decision should be made based solely on any information provided herein. There is a risk of loss from an investment in securities, including the risk of loss of principal. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable or suitable for a particular investor’s financial situation or risk tolerance. Asset allocation and portfolio diversification cannot assure or guarantee better performance and cannot eliminate the risk of investment losses.
To obtain detailed information about our services, fees and other important disclosures, please see our Form ADV Part 2A Disclosure Brochure, which can be obtained at the below link.